19Jan2016 Market Close: DOW Saved By The Bell, Closes Up Almost 30 Points, Crude Settles At 12 Year Lows As Investors Remain Unsure Of The Future

Wall Street falls; more carnage in oil stocks

(Reuters) – A recent selloff on Wall Street deepened on Tuesday as U.S. crude prices fell and an “in line” report showing slower growth in China failed to prop up an early rally.

BofA earnings beat tempered by concern about weak oil prices

(Reuters) – Bank of America Corp joined other lenders in expressing concern about weak oil prices after the No. 2 U.S. bank by assets reported better-than-expected quarterly earnings, helped by a drop in costs and revenue rises in most of its businesses.

Oil rebounds on record Chinese demand, oversupply caps gains

NEW YORK (Reuters) – Brent crude oil prices rebounded on Tuesday from 12-years lows after data showed Chinese oil demand likely hit a record high in 2015, but the recovery was not expected to last amid warnings that the market would stay oversupplied this year.

IEA says oil market may ‘drown in oversupply’ in 2016

(Reuters) – Unseasonably warm weather and rising supply will keep the crude oil market oversupplied until at least late 2016 and could push the price below its current 12-year lows, the International Energy Agency said on Tuesday.

VW says speculation over CEO’s position unfounded

BERLIN (Reuters) – Volkswagen Chief Executive Matthias Mueller has the backing of top players on the supervisory board, a spokesman said, dismissing rumors that support for him is crumbling due to his handling of the emissions crisis in the United States.

Morgan Stanley beats forecasts, girds for more cost cuts

(Reuters) – For Morgan Stanley, belt-tightening is becoming a way of life.

Confidence among CEOs sags as China’s slowdown spooks Davos

DAVOS, Switzerland (Reuters) – Confidence about near-term sales growth among chief executives around the world has fallen to its lowest level in six years as China’s economic engine slows and a slump in oil prices signals deep unease about the global outlook.

Shareholder sues Viacom board over Sumner Redstone health

(Reuters) – A shareholder filed a lawsuit against Viacom’s board on Tuesday, alleging the company and CBS improperly paid millions to executive chairman Sumner Redstone “while he was physically and mentally incapacitated.”

IMF cuts global growth forecast as China slows

WASHINGTON (Reuters) – The International Monetary Fund cut its global growth forecasts for the third time in less than a year on Tuesday, as new figures from Beijing showed that the Chinese economy grew at its slowest rate in a quarter of a century in 2015.

The Coming Era Of Financial Triage

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Virtually every major program of every major nation-state is financially unsustainable going forward.

Though triage is typically used in a medical setting, we are entering an era when financial triage will increasingly be necessary on a household, enterprise and national level.

The term triage may have originated during the Napoleonic Wars from the work of Dominique Jean Larrey. The term was used further during World War I by French doctors treating the battlefield wounded at the aid stations behind the front. Those responsible for the removal of the wounded from a battlefield or their care afterwards would divide the victims into three categories:

Those who are likely to live, regardless of what care they receive

Those who are likely to die, regardless of what care they receive

Those for whom immediate care might make a positive difference in outcome.

Financial triage is the process of sorting financial expenses/ programs that are unsustainable and cannot be “reformed”, those that cannot be saved except with systemic reforms, and those that will survive if simply scaled back.

On the household level, financial triage becomes necessary when one of the primary wage earners lose their jobs and cannot find a replacement position.

First to go are non-essentials such as cable TV subscriptions, eating out at restaurants, costly coffees from Starbucks, etc.

But scaling back these …

50 Million Americans Prepare For “Potentially Historic” Winter Storm

With the exception of a handful of one-time events, it had been such a mild winter across most of the U.S. that numerous retailers have been complaining how negatively impacted their topline has been as a result of the warmer weather (clearly having forgotten how they complained about precisely the opposite in prior years).

All that is about to change, and all those warm weather-slammed retailers are about to get just the top line-boosting gift they have been waiting for because according to AccuWeather, the Northeast – from Charleston all the way to Boston – is about to be hit with a major winter storm, with the potential for heavy snow to impact more than 50 million people at the end of the week.

AccuWeather Senior Meteorologist Dave Dombek says that “we are just now at the point [of the winter] where the air is cold enough with the ongoing storms to awaken a sleeping giant in terms of a snowstorm.”

He adds that unlike most storms so far this winter, this system will have enough cold air to produce snow and disruptions to daily activities in areas of the East that have received little thus far.

The exact track of the storm will hold the key as to which areas in the mid-Atlantic and southern New England are hit with heavy snow, dangerous highway travel and scores of flight delays and cancellations during Friday into Saturday.

The heavy snow with the storm is likely to have a fair …

Stocks Slump After Saudis Threaten Nukes Against “Nefarious” Iran

Earlier this month, a black swan landed in the Mid-East when Saudi Arabia executed prominent Shiite cleric Nimr al-Nimr along with 46 other œterrorists.

Most of those executed were not Shiites but that didn’t matter. Al-Nimr was a key voice among Saudi Arabia’s dissident Shiite minority and his death reverberated across the Shiite community, sparking mass protests from Bahrain to Pakistan.

Al-Nimr was executed on a Saturday. By Sunday evening the Saudi embassy in Tehran was ransacked and burned and Riyadh had cut diplomatic ties with Iran. The other Gulf monarchies followed suit and by the end of the following week, the stage was set for widespread sectarian strife.

As we wrote in the aftermath of al-Nimr’s execution, the ordeal couldn’t have come at a worse time for the Obama administration. With the countdown to Implementation Day for the nuclear deal under two weeks, the last thing The White House needed was to be thrust into the middle of a dispute between a traditional ally (the Saudis) and a new ‘friend’ (the Iranians).

The Sunni world (not to mention the Israelis) already feared that the lifting of international sanctions against Iran and the attendant cash windfall would strengthen Tehran just as the Ayatollah looks to preserve and expand the so-called Shiite crescent by consolidating his influence in Iraq and bolstering the Assad government in Syria. The money, some critics say, will invariably be channeled to Hezbollah and ‘ Shiite militias which effectively function as Iraq’s only effective security force. Additionally, the nuclear deal’s opponents wonder if Iran will plow its newfound wealth into the country’s famous ballistic missile program, which is alive and well as demonstrated by the test-firing of the Emad in October.

And so, with the Saudis alr …

In A Post-Boom World, Auto Prices Will Fall

Submitted by Patrick Barron via The Mises Institute,

It seems that each new bubble brings forth claims that, although the bubble may be the result of artificially created demand, prices of this or that product will not fall and may even continue to rise. How many so-called real estate and financial planning “experts” claimed that the surest path to financial security was in buying the largest house possible with the least amount of one’s own money?

The Boom: McMansions and Luxury Cars

Since home prices never go down — we were told — the gain from using OPM (other people’s money) resulted in huge multiples of gain for the little invested of one’s own money. Thus, in the first decade of the new century, Americans were buying so-called McMansions: huge homes with every imaginable feature. When the bubble burst, the leverage effect worked in reverse. Mortgage balances far exceeded the lower market price, creating the so-called “underwater mortgage.” Lower prices had wiped out not only the little equity contributed by the buyer, but created a negative equity balance. Buyers abandoned their heavy mortgages and sought smaller, lower priced homes. It turned out that home prices did not grow to the sky, as the pundits had predicted.

The same is true of automobiles, and especially those bought with auto loans. Easy credit has enticed car buyers into ever more luxurious and amenity-laden vehicles. It is nearly impossible today to buy a new car that is not loaded with luxury entertainment, navigation, and safety features that were unknown only a few years ago.

Many of these features would never have been sold in such quantities without the benefit of easy credit. As a frequent car rental customer, I have been …

Stocks Give Up Gains on Concerns About Energy

U.S. stocks gave up early gains as a renewed decline in energy prices reignited investor concerns about troubled commodity producers and global growth.

Bank of America’s Results Gain, as Legal Costs Fall

Bank of America Corp. reported its biggest annual profit in nearly a decade, a sign the second-largest U.S. bank might finally be putting some of its crisis-era troubles behind it.

Man Convicted of Fraud Scheme Gets Prison Sentence

Steven Wessel, a twice convicted fraudster, was ordered to pay back $499,000 to an investor and was sentenced to 55 months in prison.

World Economic Output Is For Subdued Demand, Diminished Prospects

from the International Monetary Fund

In 2015, global economic activity remained subdued. Growth in emerging market and developing economies – while still accounting for over 70 percent of global growth – declined for the fifth consecutive year, while a modest recovery continued in advanced economies. Three key transitions continue to influence the global outlook: (1) the gradual slowdown and rebalancing of economic activity in China away from investment and manufacturing toward consumption and services, (2) lower prices for energy and other commodities, and (3) a gradual tightening in monetary policy in the United States in the context of a resilient U.S. recovery as several other major advanced economy central banks continue to ease monetary policy.

Bond Report: Treasury yields take a breather on whipsawing day for stocks

Treasury yields finished little changed Tuesday as a rally in U.S. stocks faded driven by a slip in oil futures back below $30 a barrel.

The Tell: How to emerge from a ‘death spiral’ in stocks

As stocks give up their early session gains Tuesday and continue searching for a bottom, strategists are reminding investors that a big correction was overdue in the current bull market and that high quality is key for those who want to stay in equities.

The Wall Street Journal: David Einhorn’s Greenlight Capital takes stake in Macy’s

Einhorn says the retailer could be a takeover target.